Transurban gets $8m run on M7

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The early opening of the $1.5 billion Westlink M7 motorway
in Sydney's west has proved a boon for toll roads giant
Transurban.

As the tollway's operator, Transurban will receive an $8 million
bonus, representing $1 million a month, in return for the
40-kilometre M7 opening eight months ahead of schedule in late
December.

Additionally, proceeds from the early opening such as the net
operating surplus and interest cost savings will be pooled and
distributed to the road's owners.

Transurban and Macquarie Infrastructure Group each have a 40 per
cent share, while contractors Abigroup and Leighton Holdings each
have a 10 per cent stake in the tollway.

Because Abigroup and Leighton were directly responsible for the
early opening, they will receive a 75 per cent share of the bonus
pool, with the remainder shared among all the partners.

At Transurban's annual results briefing in August, the company
said it expected the M7 to open in April 2006, four months ahead of
schedule.

At that time, Macquarie Equities analyst Ian Myles said an early
opening was not likely to be a bonanza for Transurban. But he added
that sharing the short-term traffic risks with the construction
companies was a good arrangement, as the first six months of
traffic on toll roads was typically volatile.

Transurban has offered $50 in toll credits to each driver
setting up an electronic tag account with its subsidiary Roam by
November 12 to help guarantee steady traffic.

The M7's opening could also prove a bonus for Transurban's M2
motorway in the city's north-west, an asset it picked up through
the $6.6 billion merger with Hills Motorway earlier this year. The
M7 will be linked to the M2 and motorists will be able to use the
same electronic pass to access both roadways.

On Friday, Transurban reported M2 traffic had risen less than 1
per cent in the September quarter compared with the same period
last year because construction of the Lane Cove Tunnel had affected
key feeder routes.

The Greater Western Sydney Economic Development Board estimates
that the motorway toll will generate 24,000 jobs and $3 billion in
economic development in the region over the next three years.

Corporations such as Woolworths, Coles Myer, Coca-Cola Amatil
and BlueScope Steel are relocating to business and industrial parks
along the M7 route.

Westlink M7 general manager Flan Cleary said the new motorway
cut out 48 sets of traffic lights.

Drivers will have to pay just under 30¢ a kilometre, with
the toll capped after 20 kilometres at $5.93. All other electronic
tags will also work on Westlink M7.